HMRC SDLT: Guide to SDLT Relief for Freeports and Investment Zones Acquisitions
SDLT Relief for Freeports and Investment Zones
Relief from Stamp Duty Land Tax (SDLT) is available for certain land and building acquisitions in designated freeport and investment zone tax sites, known as “special tax sites,” under Schedule 6C of the Finance Act 2003. This relief applies to purchases made from the date a special tax site is designated until 30 September 2031 for Freeports and 30 September 2034 for Investment Zones. The relief depends on the intended and actual use of the land, and claims must be submitted by specific deadlines.
- Relief is available for land intended and used in a qualifying manner during a control period.
- Chattels and similar items do not qualify for relief as they are not subject to SDLT.
- Both residential and non-residential land can qualify, depending on use.
- Joint purchasers can claim relief if their intentions meet the qualifying conditions.
- Relief is withdrawn if the land ceases to be used in a qualifying manner during the control period.
- Claims must be made in a return and submitted by 14 October 2032 for Freeports and 14 October 2035 for Investment Zones.
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HMRC SDLT: Guide to SDLT Relief for Freeports and Investment Zones Acquisitions
Freeports and Investment Zones SDLT Relief: General Guidance
What is SDLT Relief?
Relief from Stamp Duty Land Tax (SDLT) is available when you purchase land or buildings in specific areas known as Freeports and Investment Zones. These areas are designated as ‘special tax sites’ under the Finance Act 2003.
Key Features of SDLT Relief
– Statutory Basis: This guidance refers to Schedule 6C of the Finance Act 2003.
– Definition of Land: In this context, ‘land’ includes buildings when relevant.
– Time Period for Relief:
– For Freeport tax sites: Relief applies from the date the site is designated until 30 September 2031.
– For Investment Zone tax sites: Relief applies until 30 September 2034.
You can find detailed information about the specific tax sites on the official government website, GOV.UK.
Qualifying for Relief
To qualify for relief, the land must be:
– Purchased with the intention to use it in a specific way that meets the qualifying criteria.
– Actually used in this qualifying manner throughout a control period.
Example: If you buy a piece of land intending to develop a factory, it must be used as a factory during the control period to maintain relief.
What Does Not Qualify for Relief?
– Payments made for items that are not considered land, such as chattels, will not qualify for SDLT relief as these transactions are not subject to SDLT.
Example: If you buy machinery along with a piece of land, only the payment for the land will be eligible for relief. The expense for the machinery is separate and does not affect the SDLT relief status.
Flexibility in Use of Land
Once relief is claimed, the way the land is used that did not qualify for relief does not impact the land that did qualify.
Example: If you own two plots of land, one that qualifies for relief (used as an office) and another that doesn’t (used for residential development), you can freely use the residential plot without affecting the relief on the commercial property.
Types of Land Eligible for Relief
Relief can be claimed regardless of whether the land is:
– Residential
– Non-residential
– Mixed-use
The key factor is not the type of land at the time of purchase, but rather how it is intended to be used and how it is actually used.
Joint Purchasers and SDLT Relief
Joint purchasers can benefit from the same relief as individual purchasers. Each purchaser must have an intention that meets the qualifying criteria, but not all purchasers are required to have the same intended use.
Example: If two people buy a piece of land intending to use one part as a warehouse and the other part for office space, both uses can qualify for relief as long as both intentions meet the qualifying criteria.
Withdrawal of Relief
If at any time during a control period the qualifying land is no longer used in a qualifying manner by any of the purchasers, the relief can be withdrawn.
Special Rules for Alternative Finance Arrangements
– When using alternative finance methods, the relief eligibility is based on the ‘relevant person,’ who is the individual apart from the financial institution involved in the arrangement.
– If relief is withdrawn, the responsibility for any tax owed falls on the ‘relevant person.’
How to Claim SDLT Relief
To claim the relief, it must be included in your SDLT return as specified in section 61A(4) of the Finance Act 2003.
– Claim Submission Deadlines:
– For Freeport tax sites: Claims must be submitted by 14 October 2032.
– For Investment Zone tax sites: Claims must be submitted by 14 October 2035.
These deadlines are crucial to ensure that your claim for relief is recognised and valid under the terms outlined in the Finance Act 2003.
Further Information
For a complete understanding of Freeports and Investment Zones and how they apply to your situation regarding SDLT relief, it is recommended to keep checking updates on the designated tax sites and any guidance published on GOV.UK. This resource will keep you informed about changes or additional requirements related to SDLT relief in special tax sites.
Remember, this information can be complex, and regulations may change, so it’s important to stay up to date with HMRC guidelines to fully understand your eligibility and obligations. Using professional advice or consulting with tax professionals can also help navigate these regulations more effectively.